The concept of competitive advantage has been the cornerstone of strategy
literature for many years. Michael Porter prescribed that firms can achieve
competitive advantage either through cost leadership or differentiation. However, this notion was criticized. Experts feel that firms that are successful are anyway achieving success because of their unique approach to business. In many textbooks, the concept of competitive advantage means ‘achieving success’. The authors, Makhmoor Bashir and Rajesh Verma, in the first paper, “Why Business Model Innovation Is the New Competitive Advantage”, take the discussion forward by proposing that competitive advantage alone will not suffice, and to succeed, firms must follow ‘Business Model Innovation’ to achieve competitive advantage. The authors are of the view that duplicating a business model innovation is difficult when compared to copying a product/service. The traditional version of competitive advantage, experts feel, was relevant only for mass markets where one uniform product/service made sense. Today this notion of uniformity is outdated. Executives have started spending more time on business model innovation as they believe it to be a more critical source of competitive advantage, besides being responsive to environmental shifts.
Banks are considered important engines for economic growth in any country. The banking industry is going through challenging times – rising competition among private and public sector banks, rising customer expectations of services rendered and regulatory pressure to reduce nonperforming assets are some of the more important challenges. In such a backdrop, banks have very few options. They are expected to move beyond the traditional intermediary role and deliver customer-friendly services backed by technology. The authors, Dilpreet Singh, Harpreet Singh and Namrata Sandhu, in the second paper, “Service Development Strategies Employed by Public and Private Sector Banks in India: A Comparative Study” look at how, from a banker’s perspective, service development strategies are understood, designed and delivered. The authors compared 21 public and 12 private sector Indian banks in their study. The results of the empirical study, in which 18 different services were shortlisted and analyzed, reveal subtle differences among the two – public and private sector banks. For private sector banks, quality of staff was an important consideration which was not the case with public sector banks. Both sectors agreed that Internet banking was an important service differentiator.
In countries where resource constraints inhibit the growth and development of public services, there is one model that has immense potential for growth – PPP, acronym for Public-Private Partnership. The author, Sumanth Inukonda, in the third paper, “Deliberating Reforms: Public-Private Partnerships in Indian Water and Sewerage Sector”, picks the critical areas of water and sewerage sectors and calls for active adaptation of the PPP model. These two areas involving public sanitation receive scant attention from governments. The model, according to the authors, should work well in developing countries such as India which suffer from perennial resource constraints. Doubts may exist about the efficacy of the model given the role of private sector, but this needs to be tackled if the quality of services rendered has to improve. The author discusses different challenges in water and sewerage sector in detail by taking the example of successful implementation in Mumbai and Nagpur (cities in the state of Maharashtra). Despite some areas of concern expressed by the general public, the model seems to be working and meeting the objective of improved service delivery.
The final paper, “Industry Framework of Indian Art-Metalware Handicraft Industry: A Case Study”, is the case study by Vaishali Dhingra and Manish Dhingra. The industry is an important contributor to the export earnings and provides livelihood to hundreds of skilled artisans. With modest beginnings in 1986 (export revenues of 387 cr), the industry has grown appreciably and touched export revenues of about 18,000 cr in the year 2012. The town of Moradabad in the state of Uttar Pradesh is the hub of this export activity. The metalware finds customers in far-off locations such as US, Germany and Britain, to name a few. The authors put forth a SWOT analysis of the industry and also conduct an industry attractiveness analysis using Porter’s Five Forces framework. The analysis presents an encouraging picture of the industry with some threats that are part of any skill-based industry such as handicrafts.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
